Bitcoin outflows into self-custody wallets are nearing record levels as the result of declining confidence in centralized crypto exchanges
Since Nov. 6, when the FTX collapse began, exchange outflows have increased across all BTC wallet sizes “from shrimp to whales”. The analytics provider Glassnode reported a surge in withdrawals to self-custody wallets.
Per Glassnode estimates, Bitcoin exchange outflows had hit near historic levels of 106,000 BTC per month. While previous massive outflows in November 2020, April 2022 and June/July 2022 were signs of bullish expectations, this time the withdrawals show a lack of trust in the crypto exchanges.
The number of Bitcoin wallets of various sizes receiving the asset from exchange addresses surged to around 90,000 on Nov. 9. Instead of being hodled for the long term, these BTC assets may be aimed for further trading, but stored securely within a self-custodian push.
It is apparent that self-custody prevents centralized third parties from abusing their power. We have previously reported that Alameda Research may have misused billions of dollars from FTX customers’ accounts.